How to make the most of household insurance

Mar 27, 2018

No one likes having to claim but having insurance for your household contents is vital, and at the start of a new financial year, homeowners either applying for new household insurance or revising their existing insurance should take a comprehensive inventory of their possessions and keep track of the total value.

“Misfortune at home can be easier to tolerate if you know you’re properly insured for the actual cost of any damaged, lost or stolen items,” says Gerhard Kotzé, MD of the RealNet estate agency group, “but many owners struggle to value their goods appropriately, especially if they are inherited or second-hand items that they didn’t pay a lot for in the first place.

“However, it is very important to do so, because for insurance purposes you must estimate replacement values and let your premiums be calculated on those. The reason is that if the estimated value of an item is too low, the insurance company will most likely not cover the full replacement cost in the event of a claim.

“It is just as important, though, not to overvalue your belongings, or your insurance premiums will be unnecessarily high."

He says homeowners should also make sure they have physical records of ownership. “It’s a good idea, when taking an inventory, to photograph or record a video of your belongings while describing each item you want to insure, then add model/serial numbers as well as the date of purchase and value of each item. Keeping the proof of purchase for any new belongings can also be a great help if you have to calculate the replacement value at a later stage.”

There are also many online tools today that will help you take an effective inventory and save it “in the cloud” for later. There are even mobile apps that will help value your items and automatically update to allow for inflation, such as Encircle for android phones and Belongings for iOS phones.

If you decide to print your inventory, Kotzé says, you should keep a copy of it somewhere safe and easily accessible away from home, along with the valuation or appraisal certificates for any expensive jewellery, artwork and other items that have to be individually specified. If you keep the inventory online, be sure to also add the model/ serial numbers of your items, a list of website links to their descriptions and current retail prices and scans of your valuation certificates.

“Taking your time is also key, especially if you’ve lived in your home for many years and accumulated a lot of belongings. You don’t want to discover only after a disaster that certain precious items were not insured because you overlooked them, or thought they were worth less than they were.”

At the very least, he adds, taking a thorough inventory and updating your insurance policy might make you realise that you are paying to insure things you don’t need or want anymore and that your home needs to be decluttered.

“However, it should also help to speed up your claim process following a burglary, fire, flood or storm, and reduce the stress associated with such situations. For this reason, it’s worth doing it right.”